9 June 2010 – The recession and ongoing economic uncertainty in the European Union (EU) have cut emissions levels, but accurate price signals still are needed to help consumers make decisions about energy efficiency and renewable investments.
Those were the broad conclusions reached during the Joint Plenary Panel Discussion, ‘Climate Policy Uncertainty: Where Does the Power Industry Go from Here?’ Moderated by TV presenter and journalist Stephen Sackur and streamed live over the Internet to a worldwide audience, the panel of seven industry leaders tackled a range of issues.
“We want people to look at the real costs and make rational decisions,” said Joan MacNaughton, Alstom Power Systems’ senior VP for power and environment policies. The targets are helping to cut emissions and the EU is showing greater certainty over legislation and policy than countries such as the United States. She admitted, however, the EU political framework “could be better.”
“In the EU emissions are going down,” said Matthias Hartung, CEO and president of RWE Technology. “The next step is to reduce the (emissions) cap.”
Stephen Kidd, director of strategy & research for the World Nuclear Association, said energy “has been too cheap” and that efficiency gains can be best achieved by making energy more expensive.
David Porter, CEO of the Association of Electricity Producers, UK, said higher prices will drive efficiency. “The days of cheap energy are long gone,” he said, but pointed to a “serious weakness” around the price of carbon. “The EU scheme works, but what is missing is the price.”
Sackur called efforts in Copenhagen last December to reach agreement on climate change targets a failure and asked panelists for a show of hands if they thought follow-on efforts to reach agreement this coming winter in Mexico would prove more successful. No panelists volunteered to raise a hand.
Nevertheless, the panel was reluctant to say Europe should reassess its goals for 20 per cent renewables by 2020.
MacNaughton said the targets may be at the low end of what needs to be accomplished. She called the related investment challenge “huge” and said policymakers would not ease uncertainty by changing targets.
Rainer Hauenschild, CEO of Energy Solutions for Siemens, called the 20 per cent goal already a “challenge” and said “a lot of things have to work” to reach the goal, including enhancing the grid and distribution networks and providing backup power to renewable energy.
“We have to move toward the targets but there is not one technology” to do so, he said.
Iain Miller, CEO of Doosan Power Systems, UK, said carbon pricing is not currently working, but that European policymakers are showing a willingness to set a price floor to help incent investments in nuclear, clean coal, natural gas and renewables.
Carlo Luzzatto, co-general manager of Ansaldo Energia, said it is “nonsense technically” to discuss 100 per cent renewables as a European target by 2050.
“We need to combine renewable energy with conventional sources, not only for grid stability but also to power quality purposes and security of supply. “There is always going to be a combination of all sources on the smart grid,” he said.